Asked by Dalton Regier on Jun 03, 2024
Verified
The time value of money concept:
A) Means that a dollar today is worth less than a dollar tomorrow.
B) Means that a dollar tomorrow is worth more than a dollar today.
C) Means that a dollar today is worth more than a dollar tomorrow.
D) Means that "Time is money."
E) Does not involve the concept of compound interest.
Time Value of Money
The concept that money available now is worth more than the same amount in the future due to its potential earning capacity.
Compound Interest
Interest calculated on the initial principal, which also includes all of the accumulated interest from previous periods on a deposit or loan.
- Understand the concept of the time value of money and its application in evaluating investment opportunities.
Verified Answer
SS
Shamli SheemarJun 10, 2024
Final Answer :
C
Explanation :
The time value of money concept suggests that a dollar today is worth more than a dollar tomorrow due to its potential earning capacity. This is because money available now can be invested and grow, making it worth more in the future.
Learning Objectives
- Understand the concept of the time value of money and its application in evaluating investment opportunities.